Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD3 the result in the long run would be:
A. P2 and Y2.
B. P1 and Y2.
C. P4 and Y2.
D. P1 and Y1.
Answer: B
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Assume the economy is closed and that it is operating at full employment. Which statement is TRUE when the size of the budget deficit decreases?
A) The increased amount of public goods will crowd out privately produced goods. B) A reduction in the growth of productivity, and a reduction in society's standard of living will occur. C) The interest rate will decrease, leading to an increase in investment and capital formation. D) Demand and supply of credit will increase.
Every international transaction automatically enters the balance of payments
A) once either as a credit or as a debit. B) twice, once as a credit and once as a debit. C) once as a credit. D) twice, both times as debit. E) the times, once as a credit, onces as a debit, and once as an exchange.
How has the financing of elementary and secondary education changed in the United States since 1940? What is the primary reason for this trend?
What will be an ideal response?
Exhibit 6-1 Production of pizza data Workers Pizzas 0 0 1 4 2 10 3 15 4 18 5 19 Exhibit 6-1 shows the change in the short-run production of pizzas as more workers are hired. The table shows the marginal product of the labor input is decreasing with the hiring of the third worker. A possible reason for this diminishing marginal product is:
A. decreases in labor productivity. B. increases in plant size. C. decreases in fixed cost. D. increased division of labor as additional workers are hired.